The Unlikely Path to Building a Billion-Dollar Gov Tech Company | Zac Bookman

23:58I had time. I want to make it work, but I'm looking at the investment. I'm like, ah, mortified. And then in like 16, Chambers came on the board and I assume - John Chambers, the former Cisco CEO. Yeah. And we got named a tech pioneer by the World Economic Forum. And I spoke on a panel. So the sizzle on the company didn't match the stake. Does that make sense? Yeah, it makes sense. and I didn't have enough knowledge to be like truly mortified. Like I knew something was wrong, but I didn't know how to like what to do. So like I almost lost the company in 15 and Lorene Jobs came in and put some money in and saved it with Emerson Collective.

24:38Steve Jobs' wife or, you know, a widow. And then - What do you mean she saved the company? Like you were - Like we were running out of money, you know? And you couldn't raise. Well, yeah, it just wasn't a particularly - I mean, obviously - Andreessen. Yeah. Yeah. And it was like a bridge to get you to the B basically. I mean, it started just like, I don't even know how to letter the round, you know, the money being raised. It was just an injection of cash. We're just like, so it's like, yeah, it's just like a B1 or B2 or like, you know, some of these were like, we tried to do some convertible notes, you know, and like, it's just, yeah, it's just stuff.

25:14Yeah. And then Glynn Capital and Acme came in and that was kind of around that, you know, if you look back on it, it's like this, they shouldn't have done it. And now it ended up working out very well, but like, anyhow, the weight just kept piling up and things were going in the wrong direction. And then I really almost lost the company again in 2019. I got like at least 40 no's and I was like out of bullets. To raise money. And one, I went to a bank to ask for help. I said, I know this is going to be painful. So Alan and co said they'd do it and then they rejected me. And I'll tell you the story of why they rejected me if you want.

25:51That's a grit story. Tell me a story right now. Right now. Right now. Okay. In 17, a guy named Harry Yu approached me on an intro through Andreessen, through Mark. And he came over and he said, this is the first of the whole SPAC wave. And he said, me and my older brothers, Joe Tucci, who ran EMC and Bill Green, who ran Accenture. I haven't told this publicly, except it's in a lawsuit. Came over, sat in our office, and he said, we've got a$500 million SPAC. You probably don't know what that is, but basically, we'd like to get involved with you. We think you're building the next Tyler Technology, which you may never have heard of, but does about$2 billion in revenue on software and services for state and local governments.

26:36And it's kind of the main incumbent in our corner of the world. It's like the IBM of state and local government. And he said, we love your vision and we want to go deep with you. When I called Mark, I said, what's up with these guys? He's like, I know them from the HP board and I would take them very seriously. So I flew to New York. I had breakfast with them in Josh Kushner's office. So Thrive came in very early in 13 when it was the bleakest and darkest of days that I described to you literally right after I became CEO. And I talk, I paint my vision, talk to them about the company, about the entrepreneurs that I've met in the space about how we could roll things up.

27:14And then we fly to Texas to meet the COO of Accenture who would join this and help run it. This being a SPAC. This being a SPAC. Yeah. With OpenGov as the center of it. And then I whiteboard them the whole strategy. And here's the five companies that I would buy. And I'm friends with the entrepreneurs. And I make hand deliver on introductions on the phone or text to this guy, Harry, who he was briefly the president of Oracle and he was the CFO of EMC at Accenture and is very accomplished finance guy. And I'm hand make these intros. He cuts me out at the 11th hour, signs them up to no shop, no talks, and rolls the whole thing out public without OpenGov.

27:56And you're not even part of it. And we had a letter of intent for to acquire OpenGov for 250 million. And I was actually on vacation with my brother's family in France when this is happening. I'm tweaking. I'm freaking out. This is a big moment, right? Where this is going to actually, it's probably the right thing. The company was upside down. We did have 20 or so million in revenue or something, and we're going to kind of get out of it. And everyone's going to get their money and actually make some money. And this is actually going to live a big vision that we've been working on. And then we get cut out and nobody will answer my calls.

28:29I talk to this guy every day for a whole year. Okay. Like this is like my work husband and he goes dark. I go fetal after this happens. I'm just like...

28:42And it was very painful. And a couple of the entrepreneurs go to the closing announcement dinner. So this thing becomes public. And they're like, where are you, man? The entrepreneurs that you introduced. That I introduced. They thought they were coming with me. And they show up at the dinner with Hair U. And the SPAC was called GTY. So U, Tucci, and Green. And they're like, where are you? And I'm like fetal. And I'm like, I can't believe and I can't even be upset at them. They didn't know what was happening. So I picked myself up and I said, snap out of it, man. You were a freaking trial attorney.

29:16These guys are the biggest scam artists on Wall Street. And I went over to John Kecker and he said, I'll take the case. And I took it on contingency and sued the daylights out of them. And they ended up begging for a settlement. and I would have kept going just because I was a little vindictive and also like I wasn't paying anything and I could get back to work. But Kegger called me up. It probably took a year and a half or two and he's like, take the f***ing money and move on. Let's go. And it got settled. Got settled and they paid us$6 million in non-dilutive equity finance. It was almost like a breakup fee.

29:51But much, much more valuable was the lesson that just because somebody goes to Yale or is the president of a big tech company doesn't mean they won't stab you in the back with a rusty dagger. And you need to know who you're getting in bed with and you need to be circumspect. And I need to get to a totally different level of smart to play it, you know, to play the game at the level that I'd like. Damn, what an insane story. Insane. I cut you off before you said that story. So that should have killed us. I mean, just emotionally, like morally. We keep going. I didn't have the financial discipline that we should have.

30:25It's 2019. I think we had like 23 million in revenue and literally we're burning like 23 million in cash or something. And I get like, this bank helps me do a little bit of like a fundraise and three groups said they were gonna submit LOIs. Literally by like 10 p.m. they say they're gonna do this and the next morning I wake up and every one of them is backed out. And I'm like, this is a really bad situation. And eked a round out with an investor in Tampa and I said to myself, don't ever need to raise money again. Like you should have known this. You need to get religion on expense discipline and you need to stop this fetish with like being the next Silicon Valley enterprise software company that just does conventional fundraisers and things like that.

31:15We got to build our own company. We got to be our own people and we got to do what this business needs. and we got disciplined before COVID and that has helped immensely. Do you think that that fetish came from like seeing the portfolio companies of these investors being in the Bay Area, 100%, seeing how they do it and just being like, oh, I want to be one of those high-flying companies. I just, I knew so little. I was just trying to mimic mentors and, you know, listening to smart people and looking at what others are doing And I saw Lonsdale and what they were doing at Palantir and, you know, so many other companies.

31:53And I just, you know, I mean, just trying my best, which wasn't very good at the time. And why didn't they remove you as the CEO? I think it, look, I was like a... You were going down with the ship? No, no, not, I mean, I'm not, I'm a big boy. Like, I know I go to work every day and I'm an at-will employee. And I've even given this talk at, you know, let's be clear. Like, I can be removed at any time and I can right now. I know the market cold. I know a lot of entrepreneurs in the space in terms of like, and we bought about at this point, 10 companies, many of them quite small. It's part of our innovation strategy.

32:31And I'm a cheerleader. Like I'm a, I'm an evangelist. I'm a cheerleader. So it's not like I'm completely without skills. And I think it probably would have been, there's some ethos in the Valley of like, respect the entrepreneur and respect the founders. Joe never gave up. He probably thought about it many times, but he didn't give up. And that was a big part of it. And I think, I'm sure they talked about it. And it was like, if we shoot Zach, it's probably over at the company. So what's the point? Let's just write the thing off. And to be honest, one of the reasons that I took seriously the opportunity to kind of do a major transaction slash control sale of the company last year was because I could see the investors were a little tired.

33:11and they got a lot of other things to do with their lives. And you know what I mean? I care deeply about like my fiduciary duty and I want to deliver returns and make it a success for them as well as me and the employees and the customers. You sold the company in February of 24, which is a super interesting time to sell the company. 1.8 billion is a very meaningful exit. It was right before Doge, right? And it was at the tail end of COVID or just passed when the market was down, if you had gone a year earlier during the heydays or like now? No, no, you actually have it backwards. If we'd gone a year earlier, when we started the company, there was a fair amount of excitement.

34:00It was kind of different. And we had some good people involved. And so, as I said, we had some sizzle without the steak. And then we had like many bleak years with all sorts of problems, okay? And I'm happy to tell you if those stories are interesting to you or the audience, I'm happy to tell you. But in the last few years, I put my head down. As I told you, I got a big wake-up call in 19 and it finally settled in. I actually called the Founder Collective guys. Their whole thing is like, stop raising money. Like it doesn't help you. Get capital efficient. And I was like, help, help. And I mostly just needed like inspiration.

34:36and we just started really homing in and like dialing into product market fit, product by product. And the company started working in a different way. But this was at a time when every other company is exploding and we're just the little engine that could. Literally, Mark actually at one point was like, ah, it's the little engine that could, which was like totally diminishing. And I'm like, you bomb. But the company wouldn't have been worth much at all a year before every other company was crushing it. And this, they're growing 50, 80, 100%. We're growing like 20, 25, 30. Because you were capital efficient.

35:11We're just the little engine that could. We were growing 20, 25, 30%. Every other company's growing 80%. So most people would have been like, who cares about that boring enterprise software company that sells to local governments? Well, fast forward to around when we sell and many of my friends who run impressive companies that you know, their growth literally dropped to like 15%, 12%, 11%. Some like literally were fixing their churn problems and barely growing at all. And we're growing 29%. Wow. And it's starting to get to scale well over a hundred million. It's like, wait a second, this is turning into a real company.

35:53So now if we had waited another year, we, we, we crushed it last year. And yeah, we grew 29 % last year. It's like, do I wish I waited a year? Sure. On the other hand, I think our investors should wish that I waited a year because I'm all in. I left the vast majority of my net worth in the company. So I'm a believer. I'm all in. Was it cash or equity? So this was an interesting transaction. It was all cash, but me and the management team kind of went into business with the new, yeah, with our new investor, with Cox Enterprises, which is a large family business in Georgia. And they're diversifying their 125-year-old 50 ,000 employee business across cable and automotive and healthcare, clean tech and new media.

36:42And they developed this thesis around government software. And they approached us a few years ago. We built a relationship. They underwrote an acquisition. So I'm, you know what I mean? We all need employees. We all benefit from the upside and we're all super motivated from the upside. But we took out 100 angel investors and VCs and we shrunk the board from eight to four. And it's go time. Wow. Sorry, did you say you bought 10 companies? Yeah. What was the average acquisition price? Virtually all of them are quite small. I think single digit millions in acquisition price. but one main one that was multiple hundreds millions.

37:21And we did that with Cox underwriting it. And it's proven literally all but one of the 10 has been very successful for us. But how are you, you could barely even raise money. I'll walk you through a couple and there'll be some stories of grit. So it's 2014 and amidst the chaos and the pain that I've described a little bit, we're selling transparency software so that governments can show off where all their money goes and do digital budgets. And there's a company in Seattle, we're about 2 million at the time, there's a company in Seattle that's about 20 million at the time, and it's a kind of grizzled veteran Microsoft entrepreneur, and they're selling open data, which is how you put large machine-readable data sets online.

38:04and they evidently thought that we're coming for them. Transparency and open data being maybe synonyms or something like that. So I wake up one, instead of calling me or having a chat or anything, I literally wake up one day, we have a webinar probably titled like Transparency for Local Government. And the day before our webinar is scheduled with the exact trade association that is marketing it, I see an email blast from that trade association with the same title at the same time one day before delivered by this company in Seattle. And I'm like, I literally, I had that, that fear, like my gut sunk.

38:43And I'm like, they're coming to kill us. And then they start calling our customers down and they're bare. They must have a hundred employees and growing fast. And they're calling our customers with dedicated talk tracks. Then they start copying our website, dedicated product marketing manager, copy everything from OpenGov. We had an animated website. Two months later, their website becomes animated. So they're just like, we know how to kill. We're enterprise software trained. You're dead. And I go fetal there. And then I'm like, we ain't going down without a fight. And I just rallied the troops.

39:17And I said, like, it's on. We didn't choose this. But if they're going to kill us, they're going to be real hurt in the process. And we're not going down without fighting. You shoot us, we're going to shoot back. And we went and found this four person team in New York that was doing open source open data. There's a open source standard called CCAN. And we bought the company for they had 30 ,000 in revenue. Okay. So we paid up and we might have paid like 700 K or something like this. And we said, come with us. We're going to build a practice around this and we're going to go kill these guys. And the messaging is why would you do open data on a proprietary platform where you could take advantage of the global standard that's open source.

40:00And we started taking down big deals with the city of Phoenix, with major cities, and winning deals head to head against them. And I knew enough, when you're 20 million and you're fighting and scrapping and clawing and you start losing big deals and your growth rate starts to move like that, it's a pretty ugly day and it's terrifying. And we started to beat them upside down and they went and sold off to the big competitor, Tyler, and they took six X, $150 million sale. And I call that a win. And we beat them to this day. Wow. And was the growth through acquisition strategy because? So that was desperation.

40:39Because you didn't really have like. We didn't have the product and we had no time. And you didn't have like a CTO. I mean, your CTOs keep walking out on you. I don't know who we had. Yeah, but yeah, sure. And that was not the reason. And the reason was we have no time. These products are very involved, highly specialized, tons of technology. And then people think government is easy. Oh, you just cut the line item that says waste, fraud and abuse and you'll fix everything. It's not that simple. These are very, very complicated enterprises. And the technology required for them to do their jobs is very complicated.

41:11So it was really we had no time. Backs against the wall. These guys are coming to kill us. They're calling our customers. It's terrifying. We have maybe 100 customers. Everyone is getting called with full talk tracks. OpenGov sucks. Don't go with OpenGov. Come with us. We're having a, it's like, that's scary. Like our phones are lighting up. And so we made that move and it started to work. We took that very quickly from 30K in ARR to 3 million. And it's like, wait, this is working. And then I got a call from an entrepreneur in the East Bay. And he said, hey, man, I'm dying. And I've been following OpenGov.

41:41And I believe in your mission and your vision to bring the cloud and modernize governments. and I want my baby to go to a home with values. And I didn't know the guy. And I said, I don't know you, man. And I wasn't in the market. And he's like, can we talk? I said, sure. And we worked out a deal. I mean, that was like one, one and a half. I said, I don't want to be disrespectful, but I could offer you like one times revenue or something. He's like, the mission is what matters. And I said, I'm going to make you proud if you're sure about this. And we did it. And the guy's living 10 years later.

42:13He thought he was going to die in a year. And we're still getting in touch every couple of years. and he's like, I couldn't be happier. I could not be happier. And that one worked. And then I was like, wait a second. There's something around innovation. And Chambers taught me this big time. He said, M &A is a bad word for most organic software companies. And that's wrong. How many acquisitions did Chambers do at Cisco? 186, something like that. And he's like, I've done more than just about anybody. I've made more mistakes. But he's like, it can jumpstart innovation. So we only acquire for product and quality.

42:44We don't acquire for revenue, for customer footprint, for anything like the PE acquires for. We're not a PE firm. So we acquire for incredible talent that's super mission driven, highly technical and builds products that people love. And then we dump money and engineering resources into it and we invest big time in R &D. So like that's our, if you will, our corporate development playbook. And I earned John's trust because we did one. we did one in boston and it's turned into a wonderful wonderful success for us they had maybe four and a half million in revenue this was the second largest acquisition we did and they built a permitting product and i could see it was only half built but i could see it was really modern really wow kind of territory and the entire rest of the market as many homeowners or business owners would know the rest of the market is like white screen, painful software.

43:40And I approached them and then they said no. And then they came back a year or two later and said, Hey, we love what you're doing. And we're either going to raise money or sell. And I said, you know, I'm crazy about what you're doing. And we got together, we worked out a deal and we've taken it from four and a half to 40 million in ARR. And we're still investing like crazy to this day. And it's growing 35 % at scale with 98 % gross retention. And it's all about product quality, all about talent. And Chamber said, no, no, no, don't do the deal. I said, what? And he's like, don't do it. They're not located in Silicon Valley.

44:18You can only do it in Silicon Valley. That's where the culture's at and dah, dah, dah. And I'm like, in our little corner of the world, there are no gov tech companies in Silicon Valley. Like it's a terrible place to build a gov tech business. and he's like, Zach, I know what I'm doing. I do a pretty good John and I love him by the way. He's a dear mentor. He's from West Virginia and it was another wake up call where I was like, I got to trust my own judgment. Like this is what it means to be CEO. Like you got to have the courage of your conviction and I said, John, I love you, but I'm doing this and then it worked and now he's like, you proved me wrong.

44:53Oh my God. His thought was, hey, every acquisition we did at Cisco, they were all local. Yeah, you do them in the valley. The only way to integrate them team culture values this kind of stuff and i didn't have that luxury and it turns out our market our vertical market has some different dynamics and it's able to we're able to hang on to great talent as long as we build a great culture and treat people right and invest in them and invest in their product did you bring them to the bay afterwards oh we're we're still working together today but like did they move where was no it's based in boston and now we've got you kept them in boston now we've got a raging hot office in boston you kept them in boston yeah wow when did you do your bike ride?

45:30I found myself last night looking at pictures of you on a freaking bike across the country. I looked at the map from San Francisco to where'd you end in DC? The mouth of the Chesapeake Bay in Virginia. This guy's out of his mind. Oh yeah, that was crazy. And you called it a customer tour. Well, all right, I'll tell you about that. Remind me to tell you another chamber story, by the way, if you want. Should I do it now? Tell me the chamber your story. Tell me your story. Well, this is another painful, I don't know if this is grit as much as, so I convinced Chambers to join the board and I was really excited.

46:05And this guy, he's just off of Cisco and he's starting his own, you know, his fund to give back and invest in startups. And he comes on the board and he is full of vim and vigor. And when he would come to the office, he, you got to get a six pack of diet Cokes ready. And like, he's like, let's go like, and so he comes in the board meeting and starts talking to me he's like you got the tiger by the tails act we're gonna win we're gonna win big let's hire up sales reps let's get the reps in the door and i was like i was like what i don't think we have really good product market fit and he's like yeah you do we're winning let's go and i was like well chambers can't be wrong you know like he knows what he's doing and i go so embarrassing so we go higher up another half dozen sales reps.

46:51You know, we only probably had six or eight at the time or something. Double the team. Something like that. And they all flunk out. We didn't have product market fit. He was wrong. And I almost killed the company. And you know this as well as anybody. When you're small and you don't have a product market fit that's tight and you dump a bunch of money on the company, it's very dangerous. And you hire sales reps that can't make quota and you don't have any enablement to train him. It is ugly days. Bad for morale. Indigestion. Yeah. It is so, so painful. And so that would led to, you know, another kind of, I'm like, this, this is a disaster.

47:28This is right after he comes on the board. Oh God. Yeah. What year was that? 16 or 17. Very painful. How much revenue were you doing ish? 8, 12, 14, something like that. Okay. You know what I mean? Right. Where like there's no room for mistakes like this. But it's interesting even at 8, 12, 14, you still didn't think you had product market fit. Correct. That's like a pretty, that's a decent revenue scale. Yeah. It's decent when you think about companies that have like, they have one good product and you just need to keep building features into that product. Yeah. That's not what this was. Yeah.

47:58This is what's now called compound startup or something. The products at the time. So the first product was transparency. We're selling it for five, 10, 15 K a year. You know, as well as anybody, you can't do enterprise software unless you're like Dropbox, unless you have a distribution model that you can do on like email and you know what I mean? Like a web flow. And the thing is that started scaling because we're spending 50 ,000 bucks to get a customer and another 40 ,000 to deploy it. And we're only charging 15 K not a great business model. And then we moved from transparency into internal reporting, like almost like BI business intelligence and operational reporting, what you said, dashboards and stuff.

48:37And we charged, you know, 15, 20, 25, 30, but it's the same problem. Costs you 50K to sell. When you add up sales, marketing, solutions engineering, solution architecture, the things required to sell to enterprise. And it's funny with government, a medium-sized city feels like an enterprise. That's the issue. That's the pain in the market. And then you got to deploy it. They don't know how to use it. You're going to just act like they're going to wake up and the software is going to walk in and turn itself on and they know how to use it. So you got to have services and customer success and all this stuff.

49:07That's what I mean when I say we were upside down. And so, yeah, sure. We got 8 million or 10 or 12, but like, we didn't have the beef that we didn't have the systems of record system of record with super high gross retention, absolute pull and need like a customer's like, I need this. I'm either buying yours or Oracle's. It's that simple. So we didn't have that yet. And that was the big problem. Crazy. Okay. Bike ride. Yeah. 2021 COVID. Yeah. So I'm a, were you single at this time? I had a girlfriend at the time. So not married. Okay. I'm married now to her and her name is Julia. Anyhow, I had done a lot of adventure since I was like a young kid climbing mountains.

49:52And And I did a couple like ultra marathons during the building of the company, like ran across the Grand Canyon and back. I like being out in nature and challenging myself. And I'd long wanted to, probably since high school, bike across the country. But when you get into one of these companies, just like everything goes. I managed a couple mountaineering adventures. I went to Mount Vincent in Antarctica and Aconcagua in Argentina. Those were big trips. I actually went to Mount Everest on a failed expedition. And anyway, I was like, there's no way I could bike across the country. And I was shooting the breeze with a friend of mine.

50:31And he's like, he's a documentary filmmaker. And he's like, he loves adventure. And we've done some surf trips down the Baja and through Central America. And he's like, here's an idea. I said, that's a crazy idea. And I mentioned it to our head of marketing, who's a good friend. And he's no longer with us. But he was like, dude, we could call it OpenGov Across America. We could visit customers, do local blog posts and PR, make it a stunt. And I was like, look, I'm super conflicted because I secretly want to do this. But if this is useful for the company, I'm in. And I was very ignorant. I didn't know how hard this would be.

51:08I figured I would bike five or six hours a day, bang out 100 miles, and then elevate my legs on a cheap motel bed and work for the rest of the evening and keep it going and the cumulative fatigue my body just started filling with inflammation like swelling you'd think you'd lose a bunch of weight and actually gain 10 pounds on the trip from eating so much and eating so much crap you know across fast food across america yeah i mean many towns the only thing in the town is like a bar that serves like a barbecue bacon cheeseburger with fries so like how many miles were you biking a day? 80 to 100.

51:44You were biking 80 to 100 miles a day and you gained 10 pounds? Yeah. Really weird. It took me a couple months to recover, like inflamed. And so was there a car following you? So most of the trip we had a sag wagon. So we took my brother's - It's like your suitcase. Yeah. We took my brother's Audi station wagon and wrapped it in OpenGov blue and OpenGov decals. And we called it the Cloud Cruiser. And we had somebody driving it, most days. I had a couple days and nights on my own. And then in Hanksville, Utah, at the edge of the Capitol Reef National Park, there was a flash flood and the car got washed away 80 yards in a natural disaster.

52:31And we lost the cloud cruiser and the whole town was flooded. I decided to ride through the rain. It was really stupid in retrospect because that park has flash floods and it's canyons. And some truck pulls up as it's torrential. And I was kind of enjoying life. I'm like, we're doing it. Like, let's go. Yeah, just boom, boom, boom. And they pull up like, you want to ride? You ought to get in the truck. And I'm like, no, everything's great. And they're like, you sure? And this was the last car. You know what I mean? Like the sun's coming down. It is pouring. And I was like, no, everything's good.

53:06And then they drove off and I was like, were they telling me something without telling me? Anyway, I bike through and I start to see some water come across the road and I'm going through, you know, an inch or two. And I'm like, huh. But at least I got out of there. I get to Hanksville. My father, he's a frugal guy and he rents a room at a, I mean, it's legit a meth motel. And I walk in and it's literally hollowed out. And there's, the desk is a door ripped off the wall on cinder blocks. And the guy who's almost obviously addicted to meth comes out and he's like, yeah, your dad's in the room over there.

53:38And I go over there. I said, Dad, what what are we doing here? There's a place across the street. And he's like, I'm tired. This is fine. Throw your bags down. So I said, OK. And I don't really care. I'm used to camping. And we go across the street to eat. And the waitress comes up and she's like, are you staying across the street? And we're like, yeah. And she's like, are your bags on the floor? And we're like, yeah, why? Like, can we get a meatloaf or something? You know, like, what do you. and we order and she's like, you ought to go get your bags off the floor. The water might come. And we're like, we didn't really understand, but we get up, we walk across the street and then you see this very thin film start to emerge across the road.

54:20And the motel was kind of down eight or 10 feet in a parking lot area. And we get in there, by the time we get in the room, it's a trickle, it's a creek coming in front of the door. And I snap into gear and I'm like, dad, I'll grab the bikes. I had two bikes and they're like worth more than the car. The car is kind of a junker at that point. And you grab the car and let's go. And my dad's, you know, it's like 73 at the time. And he stumbles. I hand him the keys. He stumbles out the door, drops the keys in the creek at this point in front. And he's on his knees and he's like cursing. He's like, shit, damn.

54:52And I'm like, oh, my God. You can see the water rising. I had one backup key. I grab it. I said, don't screw this up. Go. And I grab the bikes. At this point, it's thigh high. I'm carrying the bikes through this flood. he gets into the car jams it and then a wall of water hits him right as he's trying to get out and the car it's like he could have been it could have been a bad situation with him it went from ankle to kind of neck high in about 90 seconds two minutes and the whole motel was destroyed the whole town was destroyed it was actually pretty kind of traumatic night it was just like what's happening this is crazy so we lost the cloud cruiser and that was one of many small disasters on the trip And then, so what does your dad do?

55:34Does he fly home? So my dad flew home. And then you continue on? I collected myself for a week. I went back to work for a week thinking the car might be salvageable. And that was a mistake. It sat. You came back to the bay. So we stayed there the next day and I went on like the local news and actually it was the Salt Lake Channel and like, you know, it was well known in Utah, this disaster. And I got the car towed to Grand Junction, Colorado. And I had to go, I think, to a sales conference. So I went home. I collected myself for a week. And I'm like, should I just end the trip? What do we do? And I'm like, I can't end the trip.

56:14We've marketed this. This is obviously terrible. So went back out. And whoever was driving a sag wagon, we'd rent a U-Haul van or something and carried on. And you biked across the country and stopped by local governments. Yeah, although even that turned just painful. The route was the scenic route. So at the bicentennial of the United States in 1976, nine states got together and created this trans-America bike route. And they connected their scenic byways. And it's absolutely gorgeous. And I didn't know that the word scenic was basically code for mountain. and that's why I couldn't just bang out five or six hours a day and even in Kansas it's hilly and I didn't know that just small rollers and a headwind it was just terrible so the elements and the mountains and it just built up and by the time I got to the Ozarks in Missouri I mean it just kept getting worse and worse and I started having to bike eight nine ten hours a day to like make up the ground and I'm on the phone most of the day like you know talking to people at work and trying to keep things going.

57:21You're on the phone with employees. Yeah, like our company. I'm still running the company. I'm literally on Zoom. I have pictures with Zoom on my bike and my service is going in and out. It's like I have to hit mute while I go down a hill because I'm annoying everybody. It was terrible. Everyone must have thought you were out of your mind. Yeah. You thought you were out of your mind. I probably annoyed everyone. I was miserable. It's honestly a little traumatic thinking about it. It was very, very unpleasant. Where did you make it to? I made it the whole way. You made it? Yeah. How long did it take?

57:50It ended up taking me two months. I thought I could do it in like 30 or 35 days. I got behind schedule because of the flood. And we have some major conferences. So I started like pull over at the whole - You're stopping - It's planned around these conferences? No, but the logistics were insane. And I got to make everything work. And I just, I'd go to bed every night stressed out of my gourd. And I pull over at the Holiday Inn in Carbondale, Illinois. and I ask them if they can steal my bike and my duffel bag and I fly to Portland for the city managers association conference and then I fly back, put my tights on, grab the bike and roll out a Carbondale and it's like that's the way it was going.

58:35What am I going to do? I'm speaking at the trade show. I can't. So it just turned into it was just terrible. Did you even get good PR out of it? You know, not really. It was, it was, it was, and nor did it like, you know, a couple of customers wrote and were like, wow. But like, no, it was not, it was not worth it from that perspective and is even worse. So I have one another, you know, a former CRO basically tried to take over the company during that time. So while you were writing? The coup attempt, basically. I haven't told anybody about this publicly, just mostly out of respect, but like that was really, really brutal.

59:14he a very ambitious guy and presumably thought that he could just do a better job and or you know had a long history of essentially doing this and started kind of arranging how do we get zach out and me in and i'll give you this this was all uncovered you know over the many months later but i i was interviewing a chief of staff and she just kind of it was one of these rare moments or like a candidate. She's like, hey, and we were at the finish line. I said, you should talk to my partner, you know, one of our key execs of CRO. And she calls me and she's like, hey, look, I'm not taking the job. Your company's completely screwed up.

59:54But I also want you to know, like this individual you put me in touch with is nuts. And I was like, I know he's nuts, but, you know, he's done a good job. Yeah, like the good nuts, right? Yeah, you know, like we're all nuts. And she's like, no, like you've got a problem. He doesn't respect you. He wants to run the company. He said he runs the company. And I was like, huh, that's awfully weird. And then more and more things started to come out. And when I got home, I had to take care of it. And it was one of the hardest moves I've made because it was someone I loved and trusted. And it turned out to all be true.

1:00:31And yeah, so I had to pull him aside and just say, hey, we're done. and we can do this in a nice way or we can just shut everything down the second I hang up on this Zoom call with you. Damn. That is wild. And at what point did you... And just to be clear, to work up to that moment, that was a very hard move for me. Like, it was a career development move for me. Like, wow, I'm being like psychologically like taken advantage of and like betrayed. And like, wow. Again, it's just lessons learned. Yeah. You said that you could tell the investors and people that have been there. Go ahead. So, yeah, the bike trip was basically a bust and not particularly good for the company.

1:01:17Now, when we did the sale, I will, this is small silver lining, but it actually meant a lot to me given how much suffering was involved. The chairman and CEO of Cox flew out and we announced the news to all the employees and And he referenced it in the speech he gave. And he's like, hey, when I saw this bike trip, I knew we've got a crazy missionary CEO and a company that's going places. And I'm like, well, it was worth something to him. Yeah. Yeah, people think you're nuts enough to do that. Then you're probably nuts enough to build a big company. But also maybe it went into our valuation in a small way.

1:01:52For sure. For sure. If I saw that, I'd be like, this is going to be either huge or zero. I don't know which. were you not tired when it was time to sell the company? I have been tired. Given everything that you just said? Yeah, I've been tired off and on every couple years over the course of this. So, I mean, there's just been so much pain and learning and growth and suffering. So my mother died in 2015 and she died a very sad and painful death. She was an addict and an alcoholic and it was brutal. And I'm going to work and she's in hospice and the company's totally upside down and failing. And this was right when I see the board is losing faith in me.

1:02:39And it's just like, that was really brutal. And that was very close to just being like, I just don't know if I have it. I just don't know if I can do all of this. And that was one moment where you start to question and I talked to you a little bit about you know, some of the painful, I call them fundraisers, but they're really crucible moments where it's like, this company doesn't deserve to live anymore. We've screwed it up irreparably. Yeah. And that bike trip, the logistical stress as well as just the like physical toll was, I'm very stubborn, obviously, and like very persistent. And so we like pulled it through on the bike trip, but I was like, this is just dumb and it's not good for the company.

1:03:22And I feel stuck and I don't know what to do. And it's not good for my relationship. My then girlfriend, now wife, like she was not pleased and she's wailing on me. And I'm like, I need your support like big time. And like, that was another moment. And then 2023, I could see the board was getting a little tired coming off the heels of COVID. I had a couple of times a year or two prior, Chambers tried to leave the board and I like proverbially like grabbed his arm and I was like, you can't leave you can't leave don't leave me this will be a terrible sign to our employees as I said you know we were the you're growing 20 25 30 percent and everybody else is growing 80 percent I can't blame them but I'm also like 98 percent of my net worth and my whole career is wrapped up in this I know that you've got a portfolio with 100 companies and you got to play the power law but like that's called a conflict like I got to worry about us like I need you.

1:04:13So managed to keep him anyway. And then I had a whole compensation issue. I'd been running the company for a long time and we'd been seriously diluted and the founder share stuff worn out. And like, and I had some talks with the board and I could just tell they were kind of like, we don't really want to deal with this. And that's pretty demoralizing. And I could tell the Cox folks, they're like super fired up. They had this whole diversification thesis. They saw how big a company this could be? This could be a serious software company. I mean, heck, there's like incumbents in our space that we go up against every day and often beat.

1:04:52And they're 10, 50, 100 times our size. Let's go. Like, this is what it's all about. So I could see they're fired up. And I'm like, I need alignment. I need people who are fired up. Doesn't hurt that they've got incredibly deep pockets and they want to go big. Like, if I can get a huge win for our investors and make this a positive for everybody and deliver on the mission. By the way, these people buy and don't sell. This could be around 50 years from now. And they're all in on the mission and they're all in on taking care of employees. So I'm like, I see a triple win, win for employees, win for the investors, win for the customers, win maybe quadruple, win for me and the management.

1:05:30So anyway, we put together a big deal. Apparently it was like the third or fourth largest private software deal in the last five years. Yeah. I mean, might've been one of the only ones in the last three. Our banker, he gave me a couple of the stats, but he's like, there's no deals getting done. No, it's incredible. This is great. What's unbelievable is after all of these tales of misery and darkness. I hope I'm not, yeah, I hope I'm not depressing you. No, I mean, I think like this is, this is why we do the show. Like this is like. I figured, yeah. This is why we do the show. I was looking at a picture of you in the White House, I don't know, what, a month ago?

1:06:07Like at inauguration? No, no. Oh, wow. That's funny you thought that. When was it? That was in the middle of all the pain. Yeah. Wait, so the picture with you and Bezos and - Mm-hmm. Yeah. 2016, if I remember correctly. And Tim Cook and Sundar and Satya. All right, I'll give you - And I know you probably got it wrong. Wait, that was from the first inauguration? Bingo. That was from the first Trump presidency? I'll tell you. It's got some funny stories associated with it. What? Wait, so that wasn't when you were like on the mountaintop? Oh, God, no. No, it's really - There's a couple. I'll try to make them quick because I know you probably got it wrong.

1:06:37Look, that was when we had a lot of sizzle and no steak. I met a guy. I mean, this was a young guy working in the White House, and he became enamored by the company. And he was working for Kevin McCarthy at the time. And Kevin invited me to come present to Congress on their innovation day. And then this kind of subversive young, he's almost like the equivalent of an associate in a venture firm. He reached out to me and said, hey, I'm getting you on the list for a big roundtable. I said, I have no idea what you're talking about, but sounds great. I'll show up. and I show up, I didn't even bring a necktie, and I'm on the phone with my assistant that morning, she's like, you're going to the White House for the American Technology Council, like, go get a frickin' necktie, and like, thank God I did, I show up, I mean, this is like, yeah, it's Bezos, it's literally like, it's like Tim Cook, it's Satya, like, all these people, and then there's a company with like, eight million dollars in revenue or something, And it made no sense other than this young guy stuck my name.

1:07:39He's like, your company is about effectiveness, accountability in government. It's about transparency. It's about efficiency. Like you are mission driven. You're what the American Technology Council is about. And he gets me in this and I'm sitting at the big boy table, like next to like the head of VMware, Pat, and like, I think the president of MIT or something like that. And Trump goes around and he's like, I want everyone to, he basically is like, everyone should say nice words about me or something. But he's like, what are your thoughts? And I'm like, I'm like freaking out at this point. And, you know, I said something very nice.

1:08:11And he was like, that's great. That's what we need. Yeah. And so after that, my competitor, remember I described to you that company in Seattle, they are nasty. They got a PR firm to do a hit job and say that Jared Kushner, the brother of Josh Kushner, invited me. And that's the reason it's a crony thing. I had never met Jared Kushner. I had never met him until that day. and they put my front page of the Wall Street Journal, my picture, and I looked like a full possessed, you know, I had like long hair, beard. And so you can go look at the Wall Street Journal cover. And Kevin wrote me that morning.

1:08:47Kevin. McCarthy, when it comes out, he like texts me. He's like, hey man, it happens to all of us, like shake it off. And it was a hit piece. But what I discovered is no one even reads the article. So all these customers start writing. They're like, cool to see you in the Wall Street Journal. Like it ended up being super positive. And it was a hit piece about how we're crooked and crony and all this stuff. And I realized like, wow, people abuse the press. And anyway, that's what was going on there. And that was nine years ago, man. What? I thought I was going to tie this thing up with a nice bow to say everything was terrible and shitty.

1:09:22And then, look, you got invited to the White House. Look at you now. In fact, you know, the doge is going on. and look, I think Elon and the team like to build their own systems and we don't even sell to the federal government but like there's a lot of positive things going on. I'm as optimistic as I've ever been. You're generally in camp doge. I don't like the way we're treating people, personally. So I don't like that there's a lot of hardworking people who are trying to do a good job and they work for our nation's institutions and they're being disrespected. Is there waste and fraud and abuse?

1:09:57Probably. is there waste, fraud, and abuse in corporate America? Of course, in any company, in any market. I have a different view. We have a view at OpenGov that our nation's civil servants are working hard, and they're actually pretty smart. They're banging their heads against old technology. They're regulated to no end, and you know who regulates them? We do. We the people, the city councils, the state legislatures, the National Congress puts all sorts of regulations, how they can buy things, how they can act, how they can perform, what they can do. And the appropriation of money, that's from Congress.

1:10:32That's not from the agencies, typically. And so I grew up in D.C. in the 90s, and apparently Clinton and Gore cut 300 ,000 federal jobs. And they kind of played the game. They did some studies, they ran some process, and they reduced the size of the federal government. My dad ended up losing his job. His board was cut in 1996. and it wasn't until Doge that I realized, holy crap, that was when Clinton was doing his own Doge. But they did it in a way that was a little more respectful to people and frankly, they put some gloss on it. I didn't even know it until this year. So do I like government efficiency?

1:11:11Heck yeah. Do I want to cut any waste and fraud? Of course. I think most people do and I think people are just concerned maybe with how it's being done and that could we do this in a kind of a classier way where we're offering a little more dignity and respect to people. Yeah. Maybe substance with a little more style. Sure. And just to be clear, I have been indignant over various years at OpenGov when I've been mistreated or when I've seen sloth or failure. And I've made so many mistakes in how I exited people. I exited a CFO I was dear friends with. And I did it when we had a meeting at the law firm.

1:11:46I was so ignorant. I was so scared. I was like, I think I need to do this with a lawyer present. Yeah. what an incompetent fool. And she'll never talk to me again. Yeah. And I've made so many of those mistakes. I used to have a glass door that was in the tank. And like Chambers taught me a lot about like, how do you put a little polish on the rough edges? You know, and how do you let people exit with grace? Yeah. I agree with that take generally. I think I agree. It's hard. I mean, it's not fun. I think most everybody wants a leaner government that we feel like is - We want to know what we get for our money.

1:12:19And we want to know that it's outcome oriented. that it's results oriented. I mean, this is literally what we do. Our systems enable this and they open up the data and then they lead right to the dashboards you're talking about so you can show off where the money's going. You can tell the story of the budget. You can defend your priorities and you can show the outcomes and results to the developers, to the residents, what have you. So like, we feel like we've been doing, you know what I mean? We've been doing this since before it was stylish. What did they say? We're gonna go and see if the gold bars are there.

1:12:49there's some serious uh there's a lot of sizzle i hope there's a lot of steak anyway i appreciate you doing this you're delightful and truly i think that you're doing a real service for people because what everybody reads about you is the headline that you sold a company for 1.8 billion dollars and now you're riding off into the sunset and doing all these things and i think that this idea that entrepreneurship is this linear line that's up and to the right is one of the worst misnomers that we have in our industry. And so I just appreciate you being so candid about it. I'm super honored to be here.

1:13:24I'm excited for the friendship we're developing and you're a stone's throw from our office anyhow. And in terms of that, I mean, I still get that from our employees. Like, are you leaving? And I'm like, I ain't leaving. And like, we're just getting started. And this company is cranking up and I'm more fired than ever about our mission to power more effective and accountable government. And it's surprising to people that could be 12 and a half years in, almost 13 years in and still full of juice. And it's also surprising that a company could be moving past 150 million and like just getting started.

1:13:57Most companies, you know, it feels like it's working around 8 or 10 million maybe. And maybe you start having problems around 60, 80. What do we do? And like the thing's getting hotter. Like our growth rate increased last year. and so it's a very exciting time at the company and i ask employees to like have a little faith like i'm excited our backers are fired up like are you hiring we're hiring like crazy across all functions yeah we got 100 open positions we're actually hiring heavily in sales in engineering across gna i mean literally there's there's a role open in virtually every function in the company so So if look, if in person in the Bay, yeah, we're getting back to the office.

1:14:38We've got SF, Chicago, Boston, Atlanta, and Dallas. And it's a little spread out, but we sell all over the country and we've got amazing people all over the country. But yeah, we're hiring in each of those locations. We're also hiring in Pune in India and we've got an innovation hub. And yeah, we're getting to crank the cultures cranking back up in terms of like collaborating, working together. and we don't have time for it, but I'll tell you offline how many mistakes I've made around remote virtual distributed versus in office. But yeah, these are in office roles. We're working together and we're making magic and culture every day.

1:15:13When you hear the word grit, what do you think of? Suffering and fighting through the pain and getting said no to hundreds of times and getting rejected and having faith in your vision or just having the ability to get up off the floor and get out of bed and get back after it day after day. Zach, I appreciate you. Thank you for having me.

1:15:39That's it. Thanks for listening. If you liked the episode, please tell a friend and check back every Monday morning for a new guest or go back into the archives where we've done more than 200 episodes with some fantastic folks. This podcast is a Kleiner Perkins production and was edited by Eric Johnson from Lightning Pod. Thank you.

1:16:11We'll see you next time.